Alphabet, the parent company of Google, is in advanced talks to purchase Israeli cybersecurity startup Wiz for an offer of over $30 billion, making this its largest possible acquisition to date, according to a person familiar with the situation.
TakeAway Points:
- Google-parent Alphabet is in advanced negotiations to buy Israeli cybersecurity company Wiz with an offer of more than $30 billion.
- Wiz had said in an internal memo at the time that it would focus on an initial public offering.
- Stocks of companies involved in artificial intelligence and quantum computing increased on Monday, as investors hoped that Nvidia would revitalize the sagging industries with fresh announcements at its annual conference.
Alphabet to make over $30 billion purchase for Wiz
Alphabet’s latest offer is higher by roughly a third of the $23 billion deal it offered last year, which Wiz called off in July 2024 over concerns it would not clear antitrust hurdles.
Wiz had said in an internal memo at the time that it would focus on an initial public offering. Neither company has publicly acknowledged a deal.
The deal hasn’t been signed and could still change, the person familiar with the development said. The Wall Street Journal on Monday first reported the news of the talks between the companies, citing sources.
If the Wiz acquisition goes ahead, it would help Alphabet tap the cybersecurity market and expand its booming cloud infrastructure business, which generated more than $43 billion in revenue last year.
While U.S. President Donald Trump’s administration is widely expected to drop some antitrust policies pursued under the administration of President Joe Biden, a deal that creates a cybersecurity behemoth is still likely to draw scrutiny.
Wall Street had expected a bump in dealmaking after Trump’s election, but the tariffs he has imposed or threatened have roiled global markets and left businesses and investors uncertain about big decisions.
Wiz provides cloud-based cybersecurity solutions powered by artificial intelligence that help companies identify and remove critical risks on cloud platforms.
It works with multiple cloud providers such as Microsoft and Amazon and counts companies from Morgan Stanley to DocuSign among its customers. With 900 employees across the United States, Europe, Asia and Israel, Wiz previously said it planned to add 400 workers globally in 2024.
Interest in the cybersecurity industry has surged since the global CrowdStrike outage last year, making enterprises more concerned about protecting their digital infrastructures.
Wiz was last valued at $12 billion in a private funding round in May 2024.
Quantum computing AI stocks rise
Shares of quantum computing and artificial intelligence companies rose on Monday, as investors hoped that Nvidia would blow some life back into the beaten-down sectors with new announcements at its annual conference.
The five-day GTC AI conference, which was already underway, will devote an entire day to quantum computing and feature executives from notable firms including D-Wave Quantum and Rigetti Computing.
Several quantum computing stocks jumped, with D-Wave Quantum up 9.4%, while Quantum Corp and Quantum Computing gained 23.1%, and 15.5%, respectively.
Other AI-linked stocks gained in choppy trading, with SES AI soaring 30% and Dell Technologies up 3%.
Investors will focus on CEO Jensen Huang’s keynote on Tuesday to assess the latest developments in the AI and chip sectors, which have lost some luster on concerns over competing AI products in China and worries over the impact of U.S. tariffs.
“If tomorrow’s presentation is broadly positive, I don’t think it would take an awful lot to see some big upward moves in anything related to AI (or) quantum (computing) from current levels,” said David Morrison, senior analyst at Trade Nation.
“Looking at how oversold so many of these stocks are, it’s just a question of getting a catalyst for people to come back in and redeploy funds.”
The fresh focus on quantum computing is a change of pace for Huang, after his comments in January that the technology was decades away from practical use sparked a steep selloff in related stocks.
“They call this the ‘Woodstock’ of AI,” said Ken Mahoney, CEO of Mahoney Asset Management. “If (Huang) says something a little more encouraging, that could add some boost for these stocks.”
New chip system
Nvidia is expected to reveal details of a new chip system, hint at plans in other computing markets including robotics and provide updates on its Blackwell Ultra chip.
Trading was volatile, however, with Rigetti Computing reversing premarket gains.
Nvidia also reversed early gains and was last down 1.8%. The stock has slumped 11% this year after a blistering 171% rally in 2024.
“To get the AI space excited again, they have to go a little off script from what we’re expecting,” Mahoney said.
